Managers act defensively to negate high consumer debt

With the UK consumer burdened by high levels of debt and interest rates likely to rise, managers have been favouring defensive stocks at the expense of consumer cyclicals. Ed Collins, manager of the New Star UK Dynamic fund, says: "Although we do not believe there will be a hard landing, we are wary of any exposure to the consumer cyclical sector. It is likely that the Monetary Policy Committee will hike interest rates again from 4.75% if inflation increases. The consumer is heavily indebted and any further interest rate movements will impact their spending habits. "We are focused towar...